An electrolysis propulsion system consumes electrical energy to decompose water into hydrogen and oxygen. These gases are stored in separate tanks and used when needed in gaseous bipropellant thrusters for spacecraft propulsion. The propellant and combustion products are clean and nontoxic. As a result, costs associated with testing, handling, and launching can be an order of magnitude lower than for conventional propulsion systems, making electrolysis a cost-effective alternative to state-of-the-art systems. The electrical conversion efficiency is high (>85 percent), and maximum thrust-to-power ratios of 0.2 newtons per kilowatt (N/kW), a 370-sec specific impulse, can be obtained. A further advantage of the water rocket is its dual-mode potential. For relatively high thrust applications, the system can be used as a bipropellant engine. For low thrust levels and/or small impulse bit requirements, cold gas oxygen can be used alone. An added innovation is that the same hardware, with modest modifications, can be converted into an energy-storage and power-generation fuel cell, reducing the spacecraft power and propulsion system weight by an order of magnitude.